Download This PaperOn the Optimal Inflation Rate with Capital Externality
5 Pages Posted: 24 May 2019
Date Written: February 2, 2019
Abstract
This short note is to show that the strong non-superneutrality of monetary policy in Brunnermeier and Sannikov (2016) does not hold if taking into account the pecuniary externality of capital. Higher money growth rate leads to a higher level of capital but not higher growth rate of the economy at steady state.
Keywords: inflation, superneutrality, pecuniary externality, money growth rate
JEL Classification: E31, E52
Suggested Citation: Suggested Citation
Dong, Bingbing and Huang, Allen, On the Optimal Inflation Rate with Capital Externality (February 2, 2019). Available at SSRN: https://ssrn.com/abstract=3368386 or http://dx.doi.org/10.2139/ssrn.3368386
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